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tv   The Call  CNBC  March 3, 2010 11:00am-12:00pm EST

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this is "the call" on cnbc. okay. we've got stocks getting a boost from the adp report which shows jobs shed by private employers in january dropped to their lowest levels since 2006. this is a suggestion that the job market may be starting to recover. the services sector grew at the fastest pace in more than two years. the ism number. right now take a look at where we stand on the s&p, up six points and a gain of half a percentage point and the dow trading at 54, 10,460 is the latest level and the nasdaq also in the green at this moment trading up ten points, a gain of almost half a percent. bob pisani, good to see you back and what's happening down there at the nyse? >> i wish you were down here with me though, trish. >> important thing now that greece has some kind of plan to reduce the deficit and tengs turn to what's going on here in the united states and generally some pretty positive comments from u.s.-based corporations. let me run through them. joy global, you know them, they
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make mining equipment based in milwaukee here. generally positive comments here. they had bullish comments on coal consumption in the u.s. and china. they talked about earnings above consensus and they had bookings for equipment have improvement and the utilization for existing equipment has been getting a little better and positive news. in the airline group, they've all been moving up. look at us air. it's practically doubled in three months because in general revenues are improving. we have the february reports for them. their overall traffic levels, the actual number of people declined a little bit in february, but they're still doing well because they're squeezing the capacity and generally the revenue for available seat miles were up 8%. dine equity, you know them? the company that formed when apple-based joined ihop. applebee's sales are improving their margins. exthan allen. you thought this company would have been left for dead a while
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ago. great cost-cutting and they've seen an increase in orders about 25%. that's helping the overall furniture manufacturer. fairly decent commentary from some key american corporations today. larry, back to you. >> thank you, robert. so president obama making one final push to get his health care reform bill through congress in a statement coming this afternoon in which he is expected to incorporate more ideas from republicans, really, but can he get his own party onboard? let's bring in richard socratis and former adviser to bill clinton and peter flaherty. richard, i am so proud that was able to pronounce your name. welcome to "the call." what do you expect from president obama's speech today? is there any hope from this speech? republican ideas and republican support? let's start there. >> there will definitely be republican ideas that he'll incorporate. he will lay out a couple of ideas that we heard about at the health care summit last week
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that he's willing to incorporate and compromise on, but of course, compromise takes two sides and if the republican party continues to be the party of no, there won't be any compromise, but i think the important thing now is thank god, this is one final push because the time for debate is over. people are tired of the process and now we're going to have some action one way or another, whether the president has to go it alone or whether he can get bipartisan support. >> it's interesting you should bring that up because the wall street journal was particularly harsh this morning when talking about this final and continued push saying that democrats feel their chance to build a european welfare state may never come again. that may be a suicide mission. is that what it is right now in the eyes of the american public? what do you think, peter? >> well, i think this health care push has become like those birthday cake trick candles. every time you blow it out it comes back. how many final pushes have we had? i don't think the statement this afternoon or even the summit
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last week changes anything. >> maybe that's what the american people want? >> that's what i'm asking. >> richard talks about the republican party being the party of no, well, the american people are the people of no. they don't want this, yet obama persists. >> with the people that tired of is the process. this process has gone on for so long. >> they are part of the process and the process -- >> it is so miserable to watch they want to move forward. it is so totally unacceptable that we have to move forward on something and this is what elections are for. the president will move forward either by himself or with others. one way or another we'll get something. >> you've got yourself a pretty big election. >> open government. >> that's a pretty big election coming up. >> -- that's why this plan is sunk. policy has become less important than process. around the holidays obama was this close to a deal, but they were meeting behind close doors in the white house unaware that what they were doing was not playing well in massachusetts
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and the result was scott brown. you will see the same phenomenon on a national level as long as they're perceived to be changing the rules in the middle of the game. >> i don't think this is changing the rules. >> the process clearly has not -- >> hang on, let richard respond, one at a time. >> go ahead, richard. >> clearly, the process has not been a good one so far, but that's changed now. we had the health care summit. you had the president come forward and talk with the republican caucus before that and now the president is very clear. he said this is what i stand for. this is where i'm willing to compromise. if i can't get a compromise i'm willing to go forward with just the democrats and then we'll let -- >> we'll have an election and let the people decide if it works or not. >> let me press you on that point, it's a very important point. going along with the democrats. this idea of reconciliation, only 51 votes. first of all, reconciliation is for budget bills and want national social policy changes
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to take over 16%, 17% of the economy. it won't pass the byrd rule, it may not even pass the byrd rule, and i've already seen a punch of polls saying that the public does not want reconciliation. it wants a three-fifths majority to deal with such a sweeping massive change that will put the government in between me and my doctor. now, richard, isn't that really the achilles heel that the democrats looked at -- they're jamming this down the throats of an american public that doesn't like the product? >> no. and i think that there's a great misunderstanding about what reconciliation is. reconciliation is a device that was created in the '70s to deal with budget issues and tax issues and nothing could be more central to the health insurance problems in this country than budget issues. they go hand in hand. this bill will only tackle health care issues in so far as it impacts the budget. we've done this 22 times in the history of the congress of 1976.
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>> you will tell me, universal mandates -- wait a second, my friend. this goes so far beyond budget issues. budget issues is about revenues and outlays. this would layer on new entitlements, new universal mandates and a totally new relationship between the government and the patient and the doctor and the insurance companies. so, richard, that's why americans are against this, is it not? >> no, no, no. i don't think americans are against it. i actually think americans are for it. a lot of it is misunderstood, but americans will get behind it once we get past this process, and i will concede to you that it is bigger than the past reconciliations and this is a big problem. >> peter s is that the problem? americans just don't understand the process? that they want something, whatever it is? >> i think they understand the process all too well. richard says that things have changed now. obama will start opening the doors. well, now they're trying to do this through reconciliation. i don't think people understand what reconciliation is.
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according to the polls they think it's a bad thing and it just furthers the impression that people in washington are out of touch and they're reacting to their benefit and not to the american people's -- >> we're going to get beyond this. >> -- spend more time on health care. isn't this great news that charles rangel will have more time on his hands to work on health care? richard, richard, does it worry you at all? do you think there's any chance this is a huge mistake on the part of democrats? that it will come back and bite democrats in the ass in the next election? >> i don't think it's any -- i think it's definitely the right thing to do. i think it should have been done a long time ago. the president has toledo this. he is now leading and he's saying this is where we're going and we'll let the country decide at the next election whether it was the right thing to do, and he is showing great leadership and i think once we get beyond the profits into the merits of this. this is what people voted for when they elected him. >> we'll see. >> we can't have these pre-existing conditions issues -- >> pass it. >> i beg your pardon? >> peter, go ahead, last word
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because we're out of time. go ahead. >> why is it such a great idea a large majority in each house of congress under president obama's great leadership pass this thing? they couldn't pass it because it's a bad bill. >> you can see by this debate that there's still a lot of heat left in this. hopefully there will be more light after this process. >> you know as a sensible clinton adviser, and i really liked the clinton administration. they should have gone small ball, and you know that this last push for a gigantic bill with reconciliation, 51 votes, this is a political gift that keeps on giving to the republicans. you know that, richard. you know that, my friend. you are too smart -- >> we'll see in november. >> no, no, no. >> i totally disagree with you. >> all right. we've got to go. thanks to both of you for joining us. we appreciate bringing both sides of the debate. >> charles rangel as we mention side temporarily stepping down as the house ways and means committee after the house ethics committee publicly admonished
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the new york democrat last week for taking corporate paid trips to the caribbean in violation of the gift rules and the democrats are expected to name either sander levine of michigan to temporarily head the committee. >> dems certainly having their problems right now. >> the gift that keeps on giving, that's my take. hello, trish. >> hello, larry. >> we'll talk about greece. we've got greece announcing its long-awaited austerity plan and we'll go live to athens for details and discuss whether the plan goes far enough to satisfy the eu. >> and they're back. toyota announcing incentives as a way to win back their customers and its rivals will follow suit. phil lebeau has details and what it means for the industry's bottom line. you're watching cnbc, first in business worldwide. i
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hi, folks. welcome back to "the call." maybe we should call it the shout or the scream because we have a new high. check out isrg, intuitive surgical, the maker of robotic surgical devices. the stock with an all-time high and check out the numbers here,
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$347 a share. it's the third highest price index behind google and "the washington post." it also was interesting because at 14.1 billion is bigger than alcoa and closing in on heinz and kroger. it trades at 11 times estimated sales and 47 times this year's estimated earnings per share of $39. >> thanks so much. >> we have greece bracing itself for big changes as the government unveils bigger deficit cuts. we want to check out at the euro, we can show you quick. gaining quick there against the dollar, 1.37 will buy you a euro. cnbc's guy johnson joans us live from athens with the very latest on the greek plan. guy? >> hey, trish. yeah. this is the latest austerity plan. greece has had a series of these over the last few weeks in order to try to satisfy the rest of the euro zone. it is doing what is necessary to
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try and sort out its financial problems. today it was 5 billion euros being shaved off and we're talking about tax increases and we're also talking about pay cuts for civil servants. we have seen a slight tightening of greek debt. that obviously is quite positive and within the last few minutes, moody's has a negative outlook on greek debt. moody's remember, is the highest rating in terms of the sovereign story for greek debt. if it down grades it cannot be used as collateral and that's quite a pivotal move. we've had the government coming without more veiled threats to particularly berlin saying we have to help us. if you don't help us we could go to the imf. you really have got to sort this story out. we're building up to quite an incredible end to the week. not only have we got and droll,
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meeting with angela merkel who is saying she's not in favor of providing a helpinging hand for greece in terms of the debt story, but we've also now got a meeting in brussels with the european officials from around europe. they're not happy about the instrument and how it's being used to destabilize some of these european european countrit and that's building for an implication on the market. we're building up to a big end to the week. >> did the greek government go far enough with its austerity plan. that's what we're asking david kelley, market strategist and michael ryan head of ubs wealth management research. michael, you've got a country here that has shown absolutely no financial discipline. let's just call a spade a spade. it has been reckless. so why are we now to believe that the politicians will actually be able to reduce their deficit when they've never been
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able to do it before? >> well, it's amazing when you have very little choices how a motivating factor that is. let's talk about the fiscal program. it's one in a series of moves that have been made. the question, of course, is fourfold. one is it material enough? is it large enough? 4.8 billion euros at the top end of the range. second, it needs to be credible. when you look at spending cuts and tax increases it looks credible. it needs to be verifiable and the slighted hand accounting to slide under it. the last part and this is the one that's most concerting and the one you have to address. this isn't enforceable. we've talked about the potential for social unrest and that's still most concerning. at the end of day it still matters whether we're able to replicate it over time and enforce it. >> david, we'll come back to you on this. look, you've got strikes all over europe. you have lufthansa on strike and
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the air traffic controllers on strike. it is going bankrupt in europe. so what are they going to do? jack up taxes in greece, david, that is root canal without novocain. what is that going to be growth prospects for greece? raising taxes. that's no way out. >> that is an unfortunate part of where we are right now. right now the european economy is definitely lagging behind the united states and asia. we would like to see more stimulus in that area in terms of lower taxes, but we have bond vigilantes at work again and we've seen them before. in this case, in the form of credit default swaps, but it is forcing these peripheral governments to get their act together. there is no way out for grease. greece has to bring its deficit down and equally no way out for the european union. >> michael, let's talk about the precedent we could, perhaps, be setting here. you've got ireland, you've got
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portugal, you've got spain that are all in similar situations. so if greece gets a bailout why shouldn't the rest of the european countries that are struggling right now expect that they should get the same? >> well, i think that is a concern. that's the issue of moral hazard and we've been over this in the past. we dealt with it first in terms of financial institutions and now sovereign issue. >> so do you let it go the way a lehman brotherses? >> no. i don't think you do. this is one of the issues that the mechanisms within the eu to address this are very limited. you have penalties and they're rarely enforced. if this is a capital crime then here's the way you have capital punishment. you enforce it by saying i'll shoot myself in the head. that's what the eu does if they allow greece to default. they'll address this a pragmatic way. it's a political problem and it will be addressed through political solutions. is that the ideal way? does it send the wrong signal to spain? does it send a wrong signal to italy? perhaps. the risk to the eu is so broad that they're not going to allow
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greece to become the country that shook the entire eu to its core. >> sorry. just so i shoulda add, this should not be a bailout in the traditional sense. they're still going to want the greeks to make payments in the debt. they're just going to try to avoid greek interest rates shooting up to such a high level. >> will angela merkel -- that's a key point, david, that's a great point, but i want to ask you. the bond is saying, yes, they'll do what you describe, loan guarantees of the sort and everyone will live happily ever after for the next month or two until the next southern european country comes close to default. do you believe that angela merkel which i am calling the jim bunning of germany, all right? she is tough and she knows her voters do not want to help these guys and they don't want to finance the entitlement state in greece, much less germany. do you really believe that the bond market has a right to be bullish that this deal will go through? >> i think so. at the moment they've got to
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play tough for their own local electorate rats so the greeks have to say don't push us around and the germans have to say don't push us around, but in the end both the greek prime minister and the german chancelloring pragmatic politicians and they get it done. >> so the entitlement state will live on. we have to leave it there. thank you so much. when we come back. automakers are bringing back big incentives and will it boost the bottom line? phil lebeau has the story. >> betting in the box office. we'll explain how you can make money off hollywood blockbusters and you're watching cnbc, another blockbuster, first in business worldwide. at's on the s of independent investors? let's ask. when you're trading a stock, every penny counts. i hate when the trade is done and you find out you paid more than the quote price. i want it at the price i expect... or better. td ameritrade's unique trading platform uses multiple market centers to help you find the best possible price.
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>> welcome back, everyone. we have a tough morning for medvation and pfizer. the experimental drug failed its clinical trial for alzheimer's disease. take a look. both are trading down. medivation the stock down 66% and pfizer down just 1%. >> gm, chrysler and tote ar announcing 0% financing specials in march. incentives have been the addiction they've been trying to kick in order to boost revenue, but toyota is relying on incentives to win buyers back.
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phil lebeau has more from chicago. >> we told you a week and a half ago that this would be coming and now it's here. 0% march for most of the major automakers and here are the deals that are out there. toyota is pushing the envelope here, offering 0% for 60 months. gm, chrysler and ford matching to a certain extent and the reason is pretty simple. toyota is doing whatever it can to bring people in to showrooms and it's sweetening the 0% offer with a two-year maintenance program for people bringing in a toyota or have another toyota at home. this is coming after toyota sales dropped 8.7% last month. j.p. morgan is is out with a note saying toyota sales have been improving week by week and you combine that with the fact that the sales were not as poor as expected yesterday and you see why shares of toyota have come back a little bit, now above $75, up almost 3% today or 3.5% today. combine that with the fact that this is an industry that is expecting to see stronger sales in the month of march.
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what about ford? it clearly was the winner yesterday. now it's bringing back 0% financing, but it's being much more selective about the models that are being offered. ford sales jumped 43% last month and by the way, ford's 0% is between 36 and 72 months depending on the model. j.p. morgan in its notes says it's concerned that the incentive war will hurt ford pricing. keep this in mind, incentives, generally speaking are not good for the automakers and it hurts the bottom line and puts pressure the profit margins and once the automakers rolls out 0%, the other guys don't have much of a choice, melissa, but to match and we'll see this through the month of march and expect huge, huge promotions coming from toyota and the others will have to do something to match it on the ad front. you mentioned free maintenance and there are complaints from toyota owners who have had their cars repaired. how are they dealing with that? >> some of the complaints are being filed with nhtsa. people who have had their cars repaired as part of the recall
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and said i had a case of unintended acceleration and this opens up a dangerous area for toyota where people who have had repaired cars are saying it's still not fixed. i'm still having unintend acceleration. nhtsa is looking into the cases that have been reported and toyota will be looking into it as well, but we're in the he said, she said area where people are saying i've got a problem and toyota is saying it's been fixed. >> that's a problem. >> very disturbing in the paper today. ray lahood, the transportation secretary, he's somehow trying to put this toyota flap in the context of trade issues and trade problems with japan. that widens the whole debate in a very nasty way. do you know anything about this? have you talked to lahood's people? >> haven't followed that particular angle and larry, that's sort of the political argument behind what's going on when it comes to toyota. the bigger issue here is really what's going to happen not only
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with toyotas, but for the entire industry when it comes to vehicles with electronics because that's what lahood has opened up a can of worms to saying we have to look at all of these and that means we could see some changes in the industry. >> you have problems with vehicles with electronics recently. i do, by the way. my suv with general motors. >> these guys have bungled everything and they can't figure out the electronics and the car shuts down. i just want to say that on the air. >> while you're driving. >> they're going to make this into a trade war then we've got an even bigger problem than a safety problem. that's all i'm saying. i don't know what lahood's getting at here. he tends to go off a little bit, doesn't he? >> yeah. it will be interesting to watch. thanks so much, phil. >> thanks, phil. >> when we come back -- did you read the instruction manual on the suv? >> this thing just has a life of the own. >> i don't know if any instructions can save you. that's a big problem. >> this escalade shut down several times and it's been in
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the repair shop four times and they can't seem to fix it and it's an electronic computer. >> i think they'll fix it now. >> you think? >> i think you might get a call. i'm willing to use any tactic i can. >> are you listening? >> okay. are we heading for a double dip recession? we'll take a look at that as soon as we come back. >> if you love movies how would you like to trade on the next box office blockbuster? is well, we'll show you how. you're watching cnbc, first in business worldwide. tdd# 1-800-345-2550 that's why, at schwab, tdd# 1-800-345-2550 every online equity trade is now $8.95 tdd# 1-800-345-2550 no matter your account balance, how often you trade tdd# 1-800-345-2550 or how many shares... tdd# 1-800-345-2550 you pay what they pay what everyone pays: $8.95. tdd# 1-800-345-2550 and you still get all the help tdd# 1-800-345-2550 t you expect from schwab tdd# 1-800-345-2550 millions of investors. one price. tdd# 1-800-345-2550 at charles schwab... tdd# 1-800-345-2550 investors rule. tdd# 1-800-345-2550 are you ready to rule?
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>> welcome back to "the call." i'm melissa francis. let's get you caught up on the markets. the big of the trader is novell, up 26% on the day and the s&p is up two-thirds of a percentage points. take a look at the dow and the nasdaq also trading on the plus side by better than 12 points and that's half a percentage point as well. larry? >> dallas fed president richard fisher speaking with "the squawk box" gang earlier this morning saying the economy is deep and recovery will be very weak. the economic wound is deep and the recovery will be weak that from dick fisher of the dallas fed. take a listen. >> i've said this for a long time, a very gradual, i use the word anemic or tepid recovery. our people and businesses have been through a dramatic shock. >> so our question is, could we be headed for a double dip
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recession? perish the thought. let's bring in steve liesman and diane swonk who is chief economist at mesereau financial. hello, everybody. diane, i was pretty impressed today with the ism non-manufacturing numbers looked very strong and the ism's manufacturing were very strong, positive territory, seventh straight month. this doesn't look like a double dip to me. what's your thinking? >> think the chance of a double dip remain somewhere in the 10% to 20% range which is is way too high. my forecast has growth reaction cell rating to 3.5%, almost 4% by the end of the year. that said, that's nothing to write home about given the depth of the recession and so i think we'll avoid a double dip, we're in a very anemic recovery and it's very uneven. we have strong manufacturing and even see manufacturing employment improve in the month of february and that was in the adp numbers earlier today and at the end of day the housing market looks horrendous and they'll regain ground lost in
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the beginning of the year as we come in to 2010 to say they've had a recovery year. >> steve, here we are seven, eight months into this recovery and yet we're still talking about a double dip scenario. >> shouldn't this chatter kind of be over by now? shouldn't we be well on our way to recovery? what does it is a to you about the economy that we're even having this debate? is. >> i think that it is very weak is the best way to say it. the recovery has been weak and i think, trish, what's precipitated this latest round of double dip concern, you'll remember it went away several months when the numbers got strong and the numbers have weakened recently and what's really interesting is how the numbers have weakened. they've weakened uniquely when it comes to the consumer. the housing data has been bad and the consumer confidence has been bad and the jobs data is lukewarm and then to peculiar up what larry said, the business data has been quite good. the ism data has been good and the services data has been good. there was a report out this morning at duke university that
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cfos see strong earnings and they intend to do strong capital spending and see only modest hiring and there's this divergence that's out there that people will say it is not a recovery until consumers feel it in their pockets and that's not exactly how economists and economics generally see it. >> steve has this great riff and i agree with him. business is leading us outside, diane. i happen to think that's the way the world ought to work. the great stimulus, the government spending stimulus coming out of washington didn't have a thing to do with business spending -- >> i don't agree with you at all. larry, i've got to -- stop! >> it's a recovery. >> much of the growth we've seen has been because of government stimulus. let's face it. the first-time buyer tax credit for homes provided a big lift. >> you just finished telling me the sector was bad. >> that's because the first-time buyer tax credit, we had a gap before it was extended again. >> i can just say you're both right on thp diane, i think it's
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clear. we haven't gotten a whole lot of growth out of government spending but it did stabilize the economy and that was the principle you saw and larry is absolutely correct -- no, the long-term effect, trish, of stabilizing xhooty is great because if we have an ever -- >> by spending all this money on programs. >> you guys can go to kentucky and stay in bunning and i'm sure they'll be very happy to do that and look at 0% unemployment rate. i am sorry. >> listen to trish -- >> the reality is we've spent money that we just don't have. let's face it. we don't have it. >> we haven't done enough to boost and here we are eight months later still talking about some of the same issues so we don't have an economy that has gotten entirely back on track. >> we haven't spent that money. >> we were in a deep recession. >> we would have been in a deeper recession. come on, i know what 25% unemployment rate looks like. >> okay. >> would have, could have, should have, diane. let me raise another point. steve liesman, senior economics analyst for cnbc.
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i want to raise some leading indicators from our friend michael darden who has had a good record in this recovery, the positive yield curve and the upward -- steep upward-sloping yield curve is a sign of recovery, is it not? and also in the bond market, steve, the corporate bonds and spreads against treasurys have narrowed substantially and particularly the junk bonds and that's a good sign for profits and that's a good sign for recovery. aren't those leading indicators saying no double dip. >> if i can take one of those two, it's the latter, the corporate bond spreads and the corporate credit grades and if i saw the company be upgraded i would be bullish. we're in a situation where we're still leveling off from the extreme shock we've been in. if i saw that number turn around i think the positiveness has been in there for a while and it's the corporate yields and the upgrades that would be a real indicator. >> we also need to see -- >> diane, i want to ask you about the tax wall next year. this does worry me as the double
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dip in growth as trish appropriately pointed out someone will have to pay for this. taxes aring about up big time in 2011, if there is a double dip, might it be next year? hopefully by that point in time we'll -- >> we're talking about anemic growth. if you're putting on taxes on top of that what does that do to the little bit of growth you had? >> what we did was we averted more of a contraction. we're stuck with anemic growth for several years in part because the medicine is almost as bad as the disease. cancer gets treated with chemo and the chemo can almost kill you. that's what we're dealing with today. the medicine didn't cure the cancer and it's left us with the weakened immune system. >> no, i don't want steve, i don't want to spend this money. i don't think we need to be spending. >> a lot of the money hasn't got tonight programs it needs to get to. >> the mistake is the deficits are the result of spending. a large part was the result of an absolute collapse in revenue. you cannot have it both ways,
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trish. let me just finish the thought, larry. >> if you look at the deficit forecast city of. >> your deficits are from entitlements. >> they were there and the tax cuts and the reduced tax revenue. let's get our facts right. >> are we all greeks now? >> no. >> is is that the issue? >> no. >> we have a reserve. >> california, usa, is that going to be the issue? because if we tax ourselves to death which is root canal without novocain then we are going to have a double dip down the road. >> we're not all greek. i actually have more faith in the system even in washington which i hate to say, than you do. >> i love gyros and baklava. >> i can make baklava. i may not be greek, but i can cook well. >> i want to stay optimistic about this. we'll figure it out. don't ask me how, but we'll figure it out. >> there's always a way out. >> thanks, guys. when we come back, imagine if you could make a trade on "avatar" before it was released
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and now you can trade the box office. we'll tell you how it works. the stock is up 500% in the past year. we have the ceo and he will join us or rather she's going to join us, i should correct myself with her take on consumer spending. you are watching cnbc. we are first in business worldwide.
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do you shop at safeway? the grocer is falling short of wall street's expectations. you can see right now investors aren't too happy with that. almost half a percent at 24.77, the latest trade, melissa? >> you can trade futures as you know, pork bellies. why not something people are passionate about, movie ps in a cnbc exclusive julia boorstin joins us with the president of a new exchange that allows future trading on movies. julia? >> thanks so much, melissa. i am joined now by richard jacob, the president of cantor fitzgerald's cantor exchange. thank you for joining us. when we you be open for business? >> we will start trading after our cftc approval which is april 20th and we're excited that here today we've asked the cftc if we can allow customers to start funding it, a week from monday.
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>> when will people actually start trading these futures. >> you might be able to start trading after we resuf our full ftc approval and our market requires that everyone pre-funds your accounts and it will be on deposit with the clearing house in advance and so we need to start the process as soon as march 15th. >> walk you me through, how does it work. talk a movie like "avatar," how would you set the price of those contracts. >> on the first day of trading we conduct an auction. it's a bit like an ebay-style auction, we call it an ico, an initial contract offering and it sets the opening price. in the case of "avatar" it was about $200 and the market then trades. buyers and sellers who were market participants trade it like you would orange juice futures or a stock and it will settle based on the four-week box office of the movie. how far after the movie opens. >> we'll be listing for the entire summer slate and hopefully up to the holiday
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season. >> how much will people make if the contract starts for "avatar" at 200. it settled at 430 so they would have more than doubled their money. >> what about insider trading? is this a concern? >> insider trading has been a major part of the discussion with the government and we have rules, procedures, policies, computer programs in place to detect abusive behavior. i remind everybody, it's a federally-regulated marketplace. >> why would they want people speculating on their box office. >> we're hoping that by bringing transparency to the marketplace it's good for everyone. more importantly, this is just one of a foundational product for the studios. cantor hopes to bring out a number of financing products related to the futures market. >> who is your target audience? >> it could be huge. everyone from the studios, institutional investors in film product right down to the retail investor. >> richard jacobs, thank you very much for joining us. larry, you can start funding your account on march 15th. >> you can immediately see the
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problem with this, right? the studio has seen the movie and they know it stinks and they get in there and short it to make their money back. >> credit default swaps. >> i can foresee a lot of havoc. >> trouble, trouble. >> we'll have to keep an eye on it. >> on that happy note, "power lunch" is coming up at the top of the hour. what is on your plate? >> we have a lot on the plate. the president is set to outline his revised health care reform plan and we'll bring you that coverage live and we'll also debate whether the president's plan will get to the heart of the matter. how do you cut costs? also, where would you put $125 billion in this market? well, that's how much the chief investment officer of credit suisse private banking overseas, robert wissen will join us and he'll share his money-making strategies with us. is there time to get in on two stocks that have soared 300% in the past year? maybe, we'll go inside the names that are off the charts.
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back to you guys, lar. >> thank you, sue. have a great show. up next, this company is is a key indicator on the economy and shares are up more than 500% in the past year. the ceo of this red-hot stock gives us her take on the consumer. plus the market call heading into this afternoon's trading session. you're watching cnbc, first in business worldwide. #ñ#ñ#ñ#ññññ
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welcome back to "the call." with your daily realty check i'm
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diana olick in washington. mortgage applications surged 15% thanks to mortgage rates dipping below five. that brought a 17% leap in refis and home sales may be on the move as well with purchase applications up 9%. homebuilders hovnanian ended q1 in the black with a gain of $236 million mostly as a result of tax write-offs and fewer cancellations. revenues slid 14% and shares are up 6% and china outpaced the u.s. as the large of the property investment market last year according to cushman and wakefield. investment in china tumbled to 156 billion while investors spent $38.3 billion in the u.s., that's a 64% decrease. chak back at 2:50 and until then go to the blog, realtycheck.cnbc.com. melissa? >> thanks so much. retailer hsn beating street expectations big time with its fourth quarter profit. revenue rose 8% to $838 million versus forecasts of $760 million. the stock is up over 570% year over year and it's up 12% today
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after that earnings call, hsn inc. ceo mindy grossman joins us now for an exclusive interview. thank you so much for joining us. just in case people think this is against a weak comp. this is the highest quarterly sales volume in 32 years. is that organic? is is it because of acquisition or what's behind the big jump? >> there are two key things behind the jump. one, consumers re-engaged and we saw buying not only against functional purchases, but against purchases of jewelry, apparel, accessories, actually sales are up in every division of the company. second, we were ready for them to re-engage and we responded with product, with programming and with a tremendous investment in innovation to be able to access them where they were. >> the only place where there was weakness, although it was an improvement over last quarter was the cornerstone group where net sales were down 2% even though i know they were down 19% in the last quarter.
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is that a business you're going to stick with, do you think? >> well, actually if you think about it their sales were down 2%, but that was on a circulation reduction of 19% so their performance in the quarter in terms of productivity and momentum was actually very strong. we have said that these businesses are not strategically aligned, but we're really pleased with the performance of those business and in particular the three big brands, front gate, ballard design and garnet hill. >> okay. i'll be the cynic here and talk about the economy in being such a state where so many people now are home because they're not working. do you think that the unemployment rate at the level it's now at has anything to do with the success you've seen because, let's face it, you've got to be home to watch the home shopping network. >> well, i would say number one, that unemployment does not drive success. i mean, we are retailers and we need employment in this economy to drive sales.
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second, what's interesting is we are not now only accessible at home. we're online, we're on the iphone and we're on television, so, really for us we want to drive demand. we want jobs, but i will say the american consumer still wants to consume. it's the core of who we are -- >> mindy, where are they getting the money to do this? i mean, these are a lot of credit card transactions. do people have the credit lines to be out there spending? >> well, look, it's not like the spending ceiling has been raised. what we believe is that we're gaining share and we're gaining share of wallet and the customer, if they are going to spend is spending with us, and that's what's driving our business. we actually relaunched our private label in co-branded credit card this year and our accounts are up 50% year on year
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and we've actually seen extensions of line of credit which speaks to the strength of our customer. >> mindy grossman. congratulations on the quarter. you do seem to have them hooked. thanks for joining us. a quick break and we're back with the market action. >> and a list of stocks to watch as we head into afternoon trading. you're watching cnbc, first in business worldwide. hi, ellen! hi, ellen! hi, ellen! hi, ellen! we're going on a field trip to china! wow. [ chuckles ] when i was a kid, we -- we would just go to the -- the farm. [ cow moos ] [ laughter ] no, seriously, where are you guys going? ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! [ female announcer ] the new classroom. see it. live it. share it.
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on the human network. cisco. st: could switching to geico 15% or more on car insurance?e you host: did the waltons take way too long to say goodnight? mom: g'night john boy. g'night mary ellen. mary ellen: g'night mama. g'night erin. elizabeth: g'night john boy. jim bob: g'night grandpa. elizabeth: g'night ben. jim bob:'night. elizabeth: g'night jim bob. jim bob: g'night everybody, grandpa: g'night everybody. jim bob: g'night daddy. vo: geico. 15 minutes could save you 15% or more.
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all right. it's time for "the call to action" on stocks you need to watch during afternoon trading. cnbc's matt nesto is here with a look. >> guys, i don't know what the official tally is, but how many times since this bull market began a year ago have we seen the weak dollar strong commodity trade leading? that is what we are seeing of course, here today. the battle line, folks, pretty simple. take a look at the materials, the industrials and the energy versus the dollar inexdid. i could just pack it up and go home there, but they pay me to
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give you more insight. take a look at the long-term intermediate trend, the past 18 sessions of the s&p 500. you can see you've had a pretty good run and you're up 5.5% today and the fact of the matter is you're up 4% and up 12 of 18, but what's interesting is the pharmacy, biotech and life science group absolutely stone cold during that period of time ask continuing to struggle here today. big volume in radioshack. it's a private equity play. once again, people thinking it could be taken private. big lots and staples both having big volume as well. staples taking up the don vision and buy listed goldman sachs. a couple of earnings stories and we just heard from the ceo of home shopping network and joy global and dineequity coming out with blowout numbers. guys, back to you. >> thanks so much. you have a huge guest tonight. >> it will be great fun. >> senator scott brown of massachusetts will be on "the
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kudlow report" tonight at 7:00 p.m. eastern. it will be great fun. pea has a new tax cut plan. that's it. >> and you're a fan, i have no doubt. that will do it for us on "the call." i'm melissa francis. >> i'm trish regan. >> i'm larry kudlow. republicans were put on the earth to cut taxes, thank you scott brown. i'll see you on "the kudlow report" at 7:00 p.m. with senator brown. now it's time for "power lunch." and well come, everybody, to "power lunch." i'm tyler matheson, news on jobs, the services sector and greece a hat trick that wall street likes as stocks try for a fourth straight day of gains. >> i'm sue herera. the chief investment officer of credit suisse private banking has $255 billion worth of assets to work with. find out where he's putting his money these days. >> i'm michelle caruso-cabrera. we double your pleasure with two stocks that are off the charts eaoa

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